Dangote aims to cut cement prices in Nigeria by investing in new US$680 million plant

Dangote Cement Works Ltd has plans for a new 2000 ha. cement plant in Ibese, Nigeria. The construction contract was awarded to Chinese firm Sinoma International Engineering Company and is worth US$680 million The aim is for Ibese to start producing 7200 tpd of cement by July, with a total of 6 million tpa from the two production lines. Broken down, the plant will manufacture some 240 000 50 kg cement bags/d, and these will be transported daily by 800 trucks.

Whilst US$400 million will be spent on the infrastructure, equipment and construction of the cement plant itself, the other US$280 million is being invested in a 105 MW power plant with a 22 km gas pipeline. Dangote signed a US$95 million contract with Siemens International Turbomachinery for three gas turbines that will power the Ibese cement plant.

July 2011 grand opening

Chairman Alhaji Aliko Dangote expressed his delight in working with Siemens, when he said at the signing ceremony: “This contract is a signpost to our desire and determination to meet our target of completing the Ibese plant in record time, and achieving the 20 million tpa production target our cement division has set this year. But the ultimate goal in a few years is to achieve a 26 million tpa production capacity in Nigeria, whilst also expanding our presence on the continent by acquiring and developing several cement producing assets where it sees opportunities.”

Journalists were recently shown around the cement plant, and told it would be ready by July 2011. The plant will be using 95% of locally sourced raw materials, and will employ over 600 people, 70% of which will be locals. The development of the mining sites, located 3 km away from the plant and only 1 km from the crusher, is already underway. One mining site is completed and is expected to deliver three years’ worth of limestone to the plant.

Environmental promise

The new cement plant intends to achieve low fuel consumption and control dust emissions. The target is a total of 30 mg/Nm3 maximum, which is just 10% of the Federal Government's 300 mg/Nm3 benchmark for dust emissions. Additionally, the company plans to recycle and reuse all waste.

Cost pledge

Dangote said his dedication to construct the Ibese plant is defined by his determination to cut domestic cement prices. In Nigeria’s current open market a bag of cement costs between ?1850 - ?2200, whereas the price for cement bags at Dangote plants rests between ?1250 - ?1450.

“We have made a pledge to ensure that the price of cement in Nigeria comes down, but that can only be possible if the product is available in the market through increased supply,” Dangote noted.

The Director General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), John Isemede added: “For the prices of cement to be less than ?1000 per bag, the government must take deliberate steps to reduce the cost of doing business by providing power and other infrastructure so the importation of cement can stop.”

A recent report by Frost & Sullivan indicates that a lack of infrastructure within Sub-Saharan Africa economies has continued to hamper economic growth and hinder the continent’s drive to be globally competitive and eradicate poverty. However, change is on the way.